So I was at a supplier today, this was a business that had been family-run for 40 years. Whilst the company performed adequately enough one of the things that struck me was the level of process improvement that could be achieved. I asked my self why the current owner had not done it? And it struck me that the primary reason was that they did not know what good looks like.
It is not to say that the owner wasn’t running the business professionally or that they did not produce a great product but the key point was they could be doing it better, they just didn’t know it.
When my colleague and I discussed this we agreed that because the company didn’t get out much, they were concentrating on the job at hand and they just didn’t know what new innovations they could apply to their business.
This same problem applies in all of our working lives. Ask yourself the question do you know what best practice looks like for your part of the industry? are you sure?
You may think you do but you probably aren’t aware of all the innovation that could be applied.
External benchmarking can have a significant benefit to your working practices by bringing in fresh ideas and processes. The challenge is just how do you go about that.
Check out these 5 ideas on how you could improve your business by external benchmarking
1/ Decide who to benchmark against.
if you’re looking to improve part of the trick is finding businesses that don’t do things the same as you. Perhaps there’s a level of technology that’s been introduced, maybe it’s just different resource allocation or processes but if you’re just benchmarking against a similar organization that does things in a similar way the chances are you won’t learn much. Be strategic in how you select your suppliers that you can benchmark against and choose those that you can learn from the most.
2/ Focus on key drivers
If you’re looking to generate improvement ideas then you could get swamped if you try to cover too much. Focus on key aspects of your processes, for example, you could look at how processes are controlled to drive standards. You could look at how production yield is minimized. Focus on what’s important and don’t try and cover too much.
3/ Focus on the numbers then focus on the why.
Before you benchmark, consider the areas that your benchmarking and then generate some metrics that you can compare against. Using statistics helps remove any areas of ambiguity and allows you to concentrate on what is actually happening. Once you drill into the numbers you can then focus on what’s causing them. Without decent stats its guess work.
4/ Focus on the two E’s Efficiency and Effectiveness
If you’re driving improvements, look at how your benchmarking compadre drives efficiency and effectiveness within their process. Looking at the mechanics exposes things like processes, structure and controls, attributes that can be easily transferred into your own business.
5/ Benchmark customer service levels.
Businesses that excel at Customer service, usual profit. In highly competitive industries it can be a key differentiator as to why some businesses succeed and others don’t. Review things like right first time, Lead time, on-time delivery, returning customers, complaint levels etc as an indicator of performance.
Hope you found those useful if you’ve got feedback or ideas on understanding what good means or benchmarking then please use our comments section below.